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Sep. 14, 2015, 11:15 AM
- With market eyes on a Fed rate-hike decision considered to be a bit of a toss-up amid differing opinions, Goldman Sachs is banking on the (slightly) more dovish position that the agency will wait until December. The bank is still laying out how to play the hike when it invariably comes.
- Strength in balance sheets is what you need, it says, noting that those companies outperform (by an average 5%) in the three months after a rate-boosting cycle begins. In Goldman's "High Quality Stock" basket: CMG, DLTR, PEP, KMI, BLK, GOOG, AAPL, PCLN, ORCL, WFC.
- Meanwhile, it suggests avoiding companies with high floating-rate debt as they bear the brunt of a move away from near-zero interest rate policy. "When the tightening cycle finally starts, the immediate impact will be felt by firms with high proportions of variable rate borrowing."
- Included in that "avoid" list: CL, COL, JNJ, AAPL, EBAY, MET, KO, GIS, F, MCD, GM, TWX, CVX, AGN, MON.
- (Yes, cash-rich Apple made both lists, having a strong balance sheet along with floating debt.)
Sep. 11, 2015, 3:04 PM
- The eBay Plus shipping service, previously in test mode, will cost €19.90 ($22) per year in Germany, and (like Amazon Prime) provide free 2-day delivery for select goods. Free returns are promised for 30 days following a purchase.
- VP Carl Gish says the service could be expanded beyond Germany, but hasn't made any promises. Thousands of German sellers are said to have signed up for it.
- eBay's (EBAY +0.4%) lack of an internal warehouse/fulfillment infrastructure similar to Amazon's poses a challenge for its shipping efforts. Amazon, which has been outgrowing eBay in the U.S. and elsewhere, has been estimated by CIRP to have 44M U.S. Prime subs as of June, with a 95% renewal rate.
Sep. 3, 2015, 11:10 AM
- Believing its valuation now "suggests limited downside," Piper's Gene Munster has upgraded eBay (EBAY +1.8%) to Neutral. His target is $30.
- In spite of the upgrade, Munster still expects further share losses to the likes of Amazon, is critical of eBay's shopping experience, and argues secular e-commerce trends have been working against the company. He thus considers "a return to general industry growth levels" unlikely.
- Munster: "While historically consumers have used the internet for price discovery and comparison, we believe that eCommerce has matured such that consumers are more intrigued with eCommerce as a convenience method of shopping. This is disadvantageous to eBay’s experience, which requires some level of hunt-and-peck shopping. Consumers have also come to appreciate the consistency of models like Amazon and retailers, who often have set order, shipping and return policies that give consumers comfort and ease of transaction. Finally, the conciseness of the leading eCommerce experiences are making the full process of hunting for items, checking terms & conditions, and ordering relatively less appealing to consumers."
- Shares are higher on a day the Nasdaq is up 1%.
Jul. 27, 2015, 4:19 PM
- A little over a year after reports surfaced that EBAY plans to shutter its Now same-day delivery service (in test mode), the company has officially done so. An eBay spokeswoman states her company concluded same-day works better for items such as groceries and diapers than for many of eBay's core Marketplace offerings (collectibles, used goods, etc.), and that the logistics of managing same-day deliveries for 3rd-party sellers proved difficult.
- She adds eBay continues to "explore a variety of delivery options such as buy-online-pickup-in-store," and that in-store pickup will still be provided at retailers such as Best Buy and Guitar Center. Now had been launched in NYC, Chicago, Dallas, and parts of the Bay Area.
- Also getting axed: A Brooklyn pilot program offering same-day deliveries from ~80 local merchants, and eBay's Motors, Fashion, and Valet apps. The company attributes the latter move to a desire to focus on its core app, and eliminate user confusion about which app should be used.
- eBay's same-day exit comes as Amazon (NASDAQ:AMZN) continues rapidly expanding its same-day footprint. The company recently began providing free same-day services to Prime subs in 14 metro areas. Google, meanwhile, continues to invest in same-day services provided for retail partners.
- eBay closed down 0.8% today, following markets lower.
Jul. 23, 2015, 7:00 PM
- EBAY (Marketplaces) is up 1.6% AH to $28.88, and PayPal (NASDAQ:PYPL) up 1.1% to $37.40, after Amazon beat Q2 estimates with the help of an 81% Y/Y increase in AWS revenue. Q3 sales guidance is in-line.
- The e-commerce giant's North American revenue (not counting AWS) rose 26% Y/Y to $13.8B, while its international revenue (pressured by forex) rose 3% to $7.6B.
- eBay and PayPal both rallied on Monday, their first post-split trading day.
Jul. 20, 2015, 7:16 PM
- With PayPal (NASDAQ:PYPL) closing at $40.47 and EBAY (Marketplaces) at $28.57, PayPal and eBay rose a combined 4.1% today from pre-split eBay's Friday close of $66.29. PayPal is worth $49.4B, and eBay $34.7B.
- Helping PayPal: BMO, JPMorgan, Baird, SunTrust, and Wells Fargo launched coverage today with bullish ratings. Evercore went contrarian and launched at Sell.
- SunTrust's Bob Peck ($45 target) estimates PayPal's current B2C e-commerce addressable market is worth $45B+, and that its "stretch" addressable market (includes remittances, B2B e-commerce, and in-store payments - a lower share has to be assumed) could be worth ~$500B. "PayPal has 165M active users (including 10M merchants), operates in 200 countries with a support staff of 8,000, and is highly credible as it relates to international (48% of TPV), cross-border (24% of TPV), and global security and regulatory compliance ... PayPal has >$6B in cash ($2B U.S.) and capacity to raise ~$5B in debt (easily maintaining investment grade rating)."
- Baird's Colin Sebastian ($45 target): "PayPal is setting the global standard for online payments with trusted consumer brands and significant scale and reach. Now free from eBay, we believe PayPal can also accelerate newer initiatives beyond its core wheelhouse business (e-commerce)."
- Evercore's Ken Sena ($36 target), echoing past remarks, remains worried PayPal could lose share/see margin pressure on mobile, as payment platforms from tech giants that often have access to their users' card data (Apple, Google, Facebook, etc.) gain traction. Nonetheless, he admits Q2 payment volume ($66B, +20% Y/Y) was 3% better than expected, and that the Braintree/Venmo unit is giving a lift to mobile growth.
- Meanwhile, when asked in an interview about a potential deal with traditional eBay rival Amazon, PayPal CEO Dan Schulman left the door open to one. "We have the flexibility to work with any potential merchant partner across the globe ... I don’t really like to comment specifically [on potential partners.] We’ve had a wide array of discussions with various partners across the globe."
- Earlier: eBay/PayPal start trading post-split; PayPal worth nearly $50B
Jul. 20, 2015, 9:59 AM
- EBAY (Marketplaces) and PayPal (NASDAQ:PYPL) have officially begun trading as separately, publicly-traded, companies. As previously announced, eBay shareholders have been distributed one PayPal share for each eBay share owned.
- PayPal is at $40.51, and valued at $49.4B. eBay is at $27.73, and valued at $33.5B.
- Prior eBay/PayPal coverage
Jul. 16, 2015, 2:15 PM
- With expectations fairly low, EBAY has rallied to fresh highs after posting mixed Q2 results, announcing a $1B buyback hike, and offering soft full-year guidance ahead of a pending PayPal (Pending:PYPL) split. The company expects Marketplaces and PayPal to have 2015 EPS of $2.95-$3.04 between them ($1.72-$1.77 for Marketplaces, $1.23-$1.27 for PayPal), below a $3.12 consensus.
- Also: Confirming an overnight WSJ report, eBay has announced it's selling its Enterprise unit (formerly GSI Commerce) to a consortium featuring P-E firms Permira and Sterling Partners for $925M in cash. The deal is expected to close in 2H15. eBay bought GSI Commerce for $2.4B in 2011.
- PayPal metrics remained strong in Q2: Payment volume rose 20% Y/Y (+28% exc. forex) to $65.9B, with a 27% increase in merchant services volume offsetting a 1% drop in eBay-related volume. Many expect the eBay's breakup to open up more opportunities for PayPal to strike deals with eBay rivals.
- Marketplaces, hurt by Google algorithm changes and tough competition from Amazon, saw GMV fall 2% Y/Y (+6% exc. forex) to $20.1B. U.S. GMV rose 2%, and international GMV fell 5%.
- Prior eBay coverage, earnings release,
Jul. 16, 2015, 8:04 AM
- eBay (NASDAQ:EBAY) reports payments revenue rose 16% to $2.26B in Q2. PayPal new active accounts increased 11% to 169M with 1.1B transactions processed.
- Marketplaces revenue fell 3% to $2.116B as F/X played a factor. Marketplaces active buyers were up 6% during the quarter.
- Total operating expenses +10.7% to $2.29B.
- A new $1B share buyback program is announced.
- Guidance: Full-year revenue growh of 3% to 5% (ex-F/X) expected. EPS of $1.72-$1.77 seen.
- Previously: eBay beats by $0.03, misses on revenue (July 16)
- Previously: WSJ: eBay nears enterprise unit sale (July 16)
- EBAY +1.43% premarket.
Jul. 16, 2015, 7:42 AM
- eBay (NASDAQ:EBAY): Q2 EPS of $0.76 beats by $0.03.
- Revenue of $4.38B (+6.8% Y/Y) misses by $110M.
- Shares +1.21% PM.
Jul. 16, 2015, 2:04 AM
- eBay (NASDAQ:EBAY) is nearing a deal to sell its enterprise business to a consortium led by private equity firm Permira for about $900M, WSJ reports.
- The deal, which was being finalized late Wednesday, could be announced as soon as today, when the company releases its second-quarter results.
- Investors are also carefully watching eBay's PayPal (Pending:PYPL) unit, which is scheduled to complete its spin off tomorrow.
Jul. 15, 2015, 5:30 PM
Jul. 14, 2015, 5:29 PM
- PayPal (Pending:PYPL) will take parent EBAY's spot in the S&P 100 after the Marketplaces/PayPal split takes effect at the end of the week.
- PayPal will also take offshore driller Noble's (NYSE:NE) spot in the S&P 500. eBay proper will maintain its S&P 500 listing. Noble will move to the S&P MidCap 400, where it will take HMS Holdings' (NASDAQ:HMSY) spot. HMS will replace Swift Energy (NYSE:SFY) in the S&P SmallCap 600.
- EBAY +0.6% AH to $63.95. PayPal trades carried out on a "when issued" basis have unsurprisingly given the company a higher valuation than Marketplaces. Deutsche recently valued PayPal at $42/share.
Jul. 9, 2015, 4:07 PM
- Reuters reports EBAY is in talks to sell its Enterprise unit to P-E firm Thomas H. Lee for close to $1B.
- The news service cautions price disagreements remain and there's no guarantee a deal will be inked. Thomas H. Lee is said to have outbid other potential suitors in an auction process.
- Bloomberg reported last month eBay is looking to sell Enterprise, which provides e-commerce and in-store software/services for retailers, before its PayPal split, which is now set for July 17. The business, previously known as GSI Commerce, was bought for $2.4B in 2011.
- eBay closed up 1.3% to $61.78. Q2 results are due in a week.
- Update: Reuters' report coincides with news Toy 'R' Us, a major eBay Enterprise client, plans to take its U.S. e-commerce ops in-house by mid-2016.
Jul. 6, 2015, 6:30 PM
- Though PayPal (Pending:PYPL) shares won't be distributed to EBAY shareholders until after the July 17 close, shares have begun trading on a "when issued" basis (definition).
- The trades value the online/mobile payments giant at $44B, or a level equal to 59% of eBay's current $75B market cap.
- Though eBay's Payments ops only accounted for 44% of the company's 2014 revenue of $17.9B, PayPal has been widely expected to carry a higher post-split valuation than Marketplaces, given its much stronger growth profile.
- Earlier: PayPal on the hunt for more M&A opportunities
Jul. 6, 2015, 5:13 AM
- As it prepares for its July 17 split from eBay (NASDAQ:EBAY), PayPal (Pending:PYPL) is on the hunt for international acquisitions to drive growth and fend off predators, chief executive Dan Schulman told FT.
- "The balance sheet affords us the opportunity to look opportunistically where it makes sense to acquire," said Schulman. "I think there is a tremendous opportunity to look across the world."
- Last week PayPal announced it would spend nearly $1B to purchase Xoom, a digital money transfer provider, and more acquisitions now seem to be on the horizon.
- EBAY -0.3% premarket
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